Pierce Ditching Co. v. Commissioner
United States Tax Court
Petitioner, a construction company, used the cash method of accounting except that it historically accrued as a deduction bonuses for its employees determined at year end and paid within 2 1/2 months after close of year. Respondent audited petitioner for several years making no adjustments, although for 1 year the examining agent disallowed the salary deduction but was reversed upon review at higher level, and petitioner's method of accounting was accepted.
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Petitioner, a construction company, used the cash method of accounting except that it historically accrued as a deduction bonuses for its employees determined at year end and paid within 2 1/2 months after close of year. Respondent audited petitioner for several years making no adjustments, although for 1 year the examining agent disallowed the salary deduction but was reversed upon review at higher level, and petitioner's method of accounting was accepted. Held, respondent has the authority under sec. 1.446-1(c)(2)(ii), Income Tax Regs., to authorize the continued use of a method of…
1Opinion of the Court
OPINION
Sterrett, Judge:
Respondent, on July 27,1977, issued statutory notices in which he determined a deficiency in Federal income tax for taxable year 1974 in the amount of $22,923.22 against Pierce Ditching Co., Inc. (hereinafter Pierce Ditching or petitioner), and $12,001.51 against Tri-City Paving & Construction Co., Inc. (hereinafter Tri-City). Subsequently, Tri-City agreed to respondent’s claimed deficiency. After other stipulations, the sole issue remaining for our decision is whether certain salaries, incurred by Pierce Ditching in 1974 and paid in 1975, were deducted properly as…
2Cases cited6 opinions
- Electric & Neon, Inc. v. CommissionerUnited States Tax Court · 1971
- Ezo Products Co. v. CommissionerUnited States Tax Court · 1961
- Geometric Stamping Co. v. CommissionerUnited States Tax Court · 1956
- Klein Chocolate Co. v. CommissionerUnited States Tax Court · 1961
- Klein Chocolate Co. v. CommissionerUnited States Tax Court · 1959
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3Cited by11 opinions
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- Public Service Co. v. CommissionerUnited States Tax Court · 1982
- German v. CommissionerUnited States Tax Court · 1993
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